KOLKATA – The Central Bureau of Investigation (CBI) has officially registered a Regular Case (FIR) against Hemant Kanoria and Sunil Kanoria, the former directors of SREI Infrastructure Finance Ltd. (SIFL) and SREI Equipment Finance Ltd. (SEFL), for allegedly defrauding UCO Bank of over ₹991.02 crore.
The FIR, filed on January 19, 2026, follows a Preliminary Enquiry (PE) initiated under the directions of the Hon’ble Calcutta High Court. The investigation focuses on a massive criminal conspiracy involving bank officials and private individuals to divert and misappropriate public funds between 2014 and 2020.
The Scale of the Fraud
According to the investigation, the SREI group companies caused a direct wrongful loss to UCO Bank through two main credit accounts:
- M/s SREI Equipment Finance Ltd. (SEFL): ₹730.82 Crore.
- M/s SREI Infrastructure Finance Ltd. (SIFL): ₹260.20 Crore.
While UCO Bank is the primary complainant, the total outstanding liability for the entire consortium of banks—including SBI, IDBI, Bank of Baroda, and Union Bank of India—is staggering. As of June 2021, the total outstanding for SIFL stood at ₹9,673.38 crore, while SEFL reached ₹12,347.94 crore.
Modus Operandi: “Connected Entities” and Round-Tripping
A forensic audit conducted by KPMG and Saxena & Saxena revealed a complex web of financial irregularities designed to siphon funds. Key findings include:
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- Diversion to Connected Entities: The companies identified 66 “Connected Entities” linked through trusts and funds promoted by the Kanoria family. Loans were extended to these entities on unfavorable business terms with no genuine project activity.
- Evergreening of Loans: New loans were frequently sanctioned to repay previous outstanding debts, a practice known as “evergreening,” to prevent accounts from being marked as Non-Performing Assets (NPAs).
- Round-Tripping: Disbursed funds were often transferred back to the lender companies almost immediately after being moved through shell companies to create a false impression of regular loan servicing.
- Unjustified Terms: Some loans were granted with 10-year moratoriums and interest rates as low as 1% to 2% per annum, significantly harming the bank’s financial health.
The Role of the Kanoria Foundation
Investigators highlighted the Kanoria Foundation as a central controlling entity. Members of the Kanoria family served as both trustees and beneficiaries of this foundation, which was linked to several companies—such as M/s Shristi Infrastructure Development Corp. and M/s Bengal Shristi—that received substantial portions of the diverted funds.
Legal Action and High Court Intervention
The CBI registered the case under Section 120B (Criminal Conspiracy) r/w 420 (Cheating) of the IPC and relevant sections of the Prevention of Corruption Act, 1988.
The move follows a legal battle where the bank’s efforts to classify the accounts as fraud were challenged by the directors in the Calcutta High Court. Justice Tirthankar Ghosh eventually directed the CBI to proceed with the investigation, ruling that the bank had complied with the necessary “Audi Alteram Partem” (right to be heard) requirements by issuing show-cause notices to the accused.
The CBI has also noted that the role of unknown bank officials will be scrutinized to determine if lapses in monitoring and sanctioning were intentional acts of commission or omission.
